Supply Chain News / Risk & Compliance / Ports

ILA & USMX Reach Provisional Agreement

February 5, 2013

The International Longshoremen's Association (ILA) and waterfront management reached a tentative agreement on a new labor contract that averts a Feb. 7, 201 work stoppage and keeps 14 U.S. ports from Maine to Texas open for business.

The tentative agreement between the ILA and U.S. Maritime Alliance (USMX) was announced shortly before midnight on Friday, Feb. 1, by the Federal Mediation & Conciliation Service (FMCS), the federal agency that has mediated the dispute since it flared last September. The FMCS said the deal is subject to ratification and the ongoing negotiation of local pacts affecting the 14 individual ports. All ports will remain open during the follow-through process, FMCS said in the statement.

The deal was struck five days before the Feb. 6 deadline of the third and most recent contract extension. It was reported late Friday night that the contract is six years in duration. However, the FMCS statement did not disclose any information on the contract's length.

The tentative contract agreement ends a four-month impasse that twice brought the ports to the brink of being shut down. The original contract was set to expire on Sept. 30, 2012. Ten days prior, however, both sides agreed to a contract extension until Dec. 29, largely to avoid service disruptions at the tail end of the peak pre-holiday shipping season.

Still, labor and management were unable to reach a deal, and many thought a Dec. 30 work stoppage was inevitable. At the last minute, though, the parties agreed to another extension, this time until Feb. 6.

The National Retail Federation, the world’s largest retail trade association, also issued a statement from President and CEO Matthew Shay on the tentative contract agreement:

The retail industry, which supports one in every four U.S. jobs, is pleased to hear that the ILA and USMX have reached a tentative, long-term master contract. We urge the parties to quickly complete any outstanding negotiations, including local negotiations at each of the individual 14 ports, and quickly ratify the new labor agreement.

If the tentative agreement holds, the new labor contract will bring much-needed certainty and predictability to the supply chain for retailers, manufacturers, farmers and other industries that rely on the ports to move the nation’s commerce and trade. The new port labor contract, which covers container operations the each of the 14 East and Gulf Coast ports, from Maine to Texas, will help make these major ports more competitive and efficient.

The focus now turns to the local negotiations, which involve issues unique to each port. For example, the 3,300 workers at the Port Authority of New York & New Jersey, who account for slightly more than 20 percent of the union's 14,500 members, are concerned about preserving language giving them exclusive authority to repair and maintain chassis equipment provisioned there. By contrast, that is a minor issue for ILA workers at ports in Charleston and Savannah.

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